€40m investment to energise Kostal factories
THE Kostal factory in Co Limerick is to receive €40m in investment over the next three years under a new IDA-backed programme, IDA boss Barry O'Leary told the IBEC conference in Dublin yesterday.
Kostal's German parent will make the investment after choosing Abbeyfeale as the manufacturing location for a new range of solar energy products. The funds are expected to secure the future of the company in the town, but will not lead to new jobs.
"This investment is in the sustainable space and we believe it can support Kostal's future in Abbeyfeale into the future," said Kostal Ireland boss Paul Maurice.
The company manufactures electronic auto-parts at sites in Abbeyfeale and Mallow, Co Cork.
Half of the €40m investment will finance the development of a new manufacturing capacity at Abbeyfeale producing photovoltaic inverters -- hi-tech devices that convert solar power into electricity.
Production of the new products is due to begin in January. The factory will eventually switch completely from automotive parts to solar converters.
The €20m balance of the investment will fund the upgrade of existing automotive parts manufacturing facilities at Abbeyfeale and Mallow.
Kostal employs 800 people at the two sites, which makes it a major part of the economy across west Limerick, north Kerry and north Cork. Last year, the company cut 200 jobs at Abbeyfeale and 100 at Mallow.
An IDA spokesman said the funding helped secure the future of the manufacturing operation in Abbeyfeale.
The investment was not likely to lead to an increase in the overall number of jobs at Kostal, but a source said it would support maintaining jobs at something close to current levels.
The new product will require retraining of employees and will be sold to users ranging from homeowners in Greece with small solar panels on their roofs to energy companies.
The company is 100pc export oriented. Its principal customers are major German car makers Mercedes Benz, BMW and Volkswagen.
Kostal has been in Abbeyfeale since 1981 and opened the Mallow site 20 years later.